The First Department determined defendant buyer failed to demonstrate the seller was not ready, willing and able to close on the time-of-the-essence date. The seller was entitled to keep the deposit. The buyer claimed that an easement-covenant addressing a three inch encroachment was an encumbrance which violated the purchase agreement. The court held that the encroachment was a “permitted exception” under the purchase agreement:
… [B]uyer claimed that seller had not been ready, willing, and able to close because the property had an easement-covenant that had not been removed and therefore seller’s representation in the contract that there would be no encumbrances on the property at closing was untrue. The easement-covenant, which allowed the subject property to encroach three inches onto neighboring property, was disclosed in a title report issued eight months prior to the scheduled closing. …
… [D]efendant buyer failed to demonstrate that it had a lawful basis for refusing to close since the easement-covenant, which benefitted the property and was evident in the title survey, was a “permitted exception” as defined in schedule 1.21 of the contract for sale. Thus, buyer materially breached the contract when it failed to appear on the time-is-of-the-essence closing date, and, under the limited amendment to the Contract of Sale, seller is entitled to retain the deposit as liquidated damages … Pursuant to the contract, plaintiff seller is also entitled to recover its attorneys’ fees for both the proceedings before Supreme Court and this Court, to be determined, as directed by the court, by a referee. 45 Renwick St., LLC v Lionbridge, LLC, 2018 NY Slip Op 04641, First Dept 6-21-18
REAL ESTATE (EASEMENT COVENANT CONCERNING A THREE INCH ENCROACHMENT WAS A PERMITTED EXCEPTION UNDER THE REAL ESTATE PURCHASE AGREEMENT AND COULD NOT SERVE AS A GROUND FOR DEMONSTRATING SELLER WAS NOT READY, WILLING AND ABLE TO SELL THE PROPERTY ON THE TIME OF THE ESSENCE DATE, SELLER ENTITLED TO SECURITY DEPOSIT AND ATTORNEY’S FEES (FIRST DEPT))/EASEMENTS (EASEMENT COVENANT CONCERNING A THREE INCH ENCROACHMENT WAS A PERMITTED EXCEPTION UNDER THE REAL ESTATE PURCHASE AGREEMENT AND COULD NOT SERVE AS A GROUND FOR DEMONSTRATING SELLER WAS NOT READY, WILLING AND ABLE TO SELL THE PROPERTY ON THE TIME OF THE ESSENCE DATE, SELLER ENTITLED TO SECURITY DEPOSIT AND ATTORNEY’S FEES (FIRST DEPT))/TIME OF THE ESSENCE (REAL ESTATE, EASEMENT COVENANT CONCERNING A THREE INCH ENCROACHMENT WAS A PERMITTED EXCEPTION UNDER THE REAL ESTATE PURCHASE AGREEMENT AND COULD NOT SERVE AS A GROUND FOR DEMONSTRATING SELLER WAS NOT READY, WILLING AND ABLE TO SELL THE PROPERTY ON THE TIME OF THE ESSENCE DATE, SELLER ENTITLED TO SECURITY DEPOSIT AND ATTORNEY’S FEES (FIRST DEPT))/PURCHASE CONTRACT (REAL ESTATE, EASEMENT COVENANT CONCERNING A THREE INCH ENCROACHMENT WAS A PERMITTED EXCEPTION UNDER THE REAL ESTATE PURCHASE AGREEMENT AND COULD NOT SERVE AS A GROUND FOR DEMONSTRATING SELLER WAS NOT READY, WILLING AND ABLE TO SELL THE PROPERTY ON THE TIME OF THE ESSENCE DATE, SELLER ENTITLED TO SECURITY DEPOSIT AND ATTORNEY’S FEES (FIRST DEPT))/PERMITTED EXCEPTION (REAL ESTATE, PURCHASE CONTRACT, EASEMENT COVENANT CONCERNING A THREE INCH ENCROACHMENT WAS A PERMITTED EXCEPTION UNDER THE REAL ESTATE PURCHASE AGREEMENT AND COULD NOT SERVE AS A GROUND FOR DEMONSTRATING SELLER WAS NOT READY, WILLING AND ABLE TO SELL THE PROPERTY ON THE TIME OF THE ESSENCE DATE, SELLER ENTITLED TO SECURITY DEPOSIT AND ATTORNEY’S FEES (FIRST DEPT))/TIME OF THE ESSENCE (REAL ESTATE, EASEMENT COVENANT CONCERNING A THREE INCH ENCROACHMENT WAS A PERMITTED EXCEPTION UNDER THE REAL ESTATE PURCHASE AGREEMENT AND COULD NOT SERVE AS A GROUND FOR DEMONSTRATING SELLER WAS NOT READY, WILLING AND ABLE TO SELL THE PROPERTY ON THE TIME OF THE ESSENCE DATE, SELLER ENTITLED TO SECURITY DEPOSIT AND ATTORNEY’S FEES (FIRST DEPT))/SECURITY DEPOSIT (REAL ESTATE, EASEMENT COVENANT CONCERNING A THREE INCH ENCROACHMENT WAS A PERMITTED EXCEPTION UNDER THE REAL ESTATE PURCHASE AGREEMENT AND COULD NOT SERVE AS A GROUND FOR DEMONSTRATING SELLER WAS NOT READY, WILLING AND ABLE TO SELL THE PROPERTY ON THE TIME OF THE ESSENCE DATE, SELLER ENTITLED TO SECURITY DEPOSIT AND ATTORNEY’S FEES (FIRST DEPT))/ATTORNEY’S FEES (REAL ESTATE, EASEMENT COVENANT CONCERNING A THREE INCH ENCROACHMENT WAS A PERMITTED EXCEPTION UNDER THE REAL ESTATE PURCHASE AGREEMENT AND COULD NOT SERVE AS A GROUND FOR DEMONSTRATING SELLER WAS NOT READY, WILLING AND ABLE TO SELL THE PROPERTY ON THE TIME OF THE ESSENCE DATE, SELLER ENTITLED TO SECURITY DEPOSIT AND ATTORNEY’S FEES (FIRST DEPT))